Federal health insurance costs may vary substantially by plan

Dec. 3, 2013 - 06:00AM
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When Office of Personnel Management administrators announced the latest federal health insurance changes this fall, they touted the fact that the average premium increase for next year is 3.7 percent.

But that average masks some big increases in particular plans, along with large disparities in what they may charge overall. The total biweekly premium for the Mail Handlers nonpostal value family plan, for example, will rise 21 percent from about $411 to $497, according to a rate schedule released by OPM. The employee share will rise proportionately, from almost $103 to about $124 per pay period.

And while an employee enrolled in the Kaiser Foundation health management organization’s “high self” nonpostal plan for northern California will shoulder a monthly premium of about $353 next year, the monthly cost for an enrollee in the comparable plan for Kaiser’s southern California HMO is $141, the OPM figures show.

The key reason for those differences is simple, said Walt Francis, author of an annual guide to federal employee health plans: “Each plan has to cover the cost of the people who are in it.”

The pricetags for the Kaiser plans differ, Francis said, because there are almost no HMOs left in northern California and the Kaiser plan there has a large number of federal retirees who are not eligible for Medicare. That drives up the cost of coverage.

“They are loaded up with costly, elderly people who are missing either [Medicare] Part A or Part B,” he said.